Joined: Jun 18, 2005 Posts: 3894 Location: In a van down by the river
Posted: Fri May 16, 2008 9:49 am Post subject: Re: Another Record ($127.79)
Well there are times when things go parabolic. Instead of nice channel pointing to a general rise in price over time, you have a chart that accelerates and the price starts rising faster in a shorter amount of time.
Oil has the potential to do that, will it? Is anyones guess.
They think that there will be an average of $141 in the second half of the year. _________________ Deep in the mud and slime of things, even there, something sings.
Posted: Fri May 16, 2008 10:01 am Post subject: Re: Another Record ($127.79)
jeffvail wrote:
My hunch is that technical trading is valid, but only because it is a self-fulfilling prophecy whereby traders move the market because they act in the belief that there is "resistance" at a certain point, etc.
The hunch above is exactly right.
Now when there are actual shortages the price will rise even faster and may break a lot of technical indicators, but then it will just get into a new trend channel or something. Technical analysis always plays some role in the temporary ups and downs between huge events because there are a bunch of nerds like me with computers and graphs ...
They say that the price isn't going down because the front month contracts are so strong that they won't let it sag.
It's getting interesting.
Quote from the article: U.S. President George W. Bush will today ask Saudi Arabia to increase oil production to help lower prices and promote economic growth, White House spokeswoman Dana Perino said. Banks including UBS AG and Sanford C. Bernstein have raised their 2008 forecasts while Goldman Sachs analyst Arjun Murti has said oil may rise to between $150 and $200 within two years.
Haven't we just done that multiple times recently. We're begging. Plain and simple. Like 3 year olds who've been told no and we whining, "Please, please, please..."
Or maybe we have something else to offer them to get them to do it. Wonder what that could be?
Posted: Fri May 16, 2008 10:37 am Post subject: Re: Another Record ($127.79)
Quote:
President Bush was in the oil-rich country Friday to appeal to King Abdullah for greater production to help halt rising gas prices in the United States.
But his national security adviser, Stephen Hadley, says Saudi officials stuck to their position that they already are meeting demand.
Hadley told reporters, "What they're saying to us is ... Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy."
Posted: Fri May 16, 2008 10:44 am Post subject: Re: Another Record ($127.79)
Not only are we whining, but we're throwing temper tantrums as well:
Also, as Bush prepared to leave Washington, Senate Democrats introduced a resolution that would block $1.4 billion in arms sales to Saudi Arabia unless Riyadh agrees to increase its oil production by 1 million barrels per day. The Democrats said they introduced the measure to coincide with Bush's trip to send a message to Saudi Arabia that it should pump more oil to reduce the cost of gas for Americans.
From the article above. That will teach them. Teach them to buy arms from somebody else. _________________ Deep in the mud and slime of things, even there, something sings.
Posted: Fri May 16, 2008 11:23 am Post subject: Re: Another Record ($127.79)
I'm enough of a nerd to love chuck's graphs, but I think jeffvail hit it on the head when he said:
"My concerns with the application of standard technical indicators to the present oil market: show me a previous market in any commodity where supply is declining amidst highly inelastic demand and no viable substitute. I can't think of one off the top of my head, but assuming one exists, technical indicators should be weeded out if they didn't perform in that market."
We're wading into new territory here, and most technical analysis will be useful only in ever shorter bits of time. When complex systems start to break down, patterns start emerging and dissolving rather quickly.
Note, though that chuck's graph is logarithmic --the straight lines are actually exponential curves: in two year intervals since '02 oil has hit (or nearly hit) the following prices: 20, 40, 80...
I had long predicted, based on these figures to the scorn and derision of many even on these threads, that oil would hit 160 this year.
But the recent trends suggest that we may have already gone past exponential into hyperbolic price increase. This puts it beyond my modest mathematical capacities to calculate what we are looking at in the next few years, but it ain't pretty.
This is all not to say we couldn't see some wild swings along the way. I'd say they are quite likely, but timing them and especially putting money down on such timing is like trying to catch a falling knife.
Last edited by dohboi on Fri May 16, 2008 1:49 pm; edited 1 time in total
Joined: Sep 16, 2004 Posts: 4412 Location: Southwest WI
Posted: Fri May 16, 2008 11:35 am Post subject: Re: Another Record ($127.79)
A) Senators are really stupid
B) Senators are trying to look like they are doing something so they don't get voted out of office.
I'm sure the first one has a few members, but most will say about anything to get a vote (or a handjob). _________________ "Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling"
-President Bush 11/07/07
Posted: Fri May 16, 2008 12:11 pm Post subject: Re: Another Record ($127.79)
If senators are too dumb to understand peak oil then we need peak oil candidates. America needs to start rationing right now and we need higher gas taxes to keep some of the oil money in the country.
Joined: Sep 19, 2007 Posts: 1314 Location: Land of the Tongva tribe
Posted: Fri May 16, 2008 12:18 pm Post subject: Re: Another Record ($127.79)
Novus wrote:
America needs to start rationing right now and we need higher gas taxes to keep some of the oil money in the country.
Good luck getting elected with those positions.
joeltrout _________________ ENERGY is the basis of our industrial civilization and sustains our standard of living. It is the foundation stone of our national wealth. A nation starved of energy.....will be a nation of starving people.
Joined: Apr 05, 2007 Posts: 155 Location: Great Britain
Posted: Fri May 16, 2008 12:19 pm Post subject: Re: Another Record ($127.79)
agree with dohboi. technical analaysis has been shown to work within a specific time period that could be one minute, ten minute sveral hours depending on the investment. eg currency trading is a good example.
The time window changes depending on the strength of external events eg a lot of technie guys stop using it if a large external event (eg pipeline blast) occurs.
This issue increasingly with oil at the moment is the number of external events eg russia peaking, pipes being blown up US/Suadi counter press briefings etc. the result is TA is not as helpful.
They think that there will be an average of $141 in the second half of the year.
I feel a twinge of hypocrisy in praising GS for their high price predictions, but let's tacitly go with that.
An average of $141 in the sceond half of the year would mean the goose is cooked.
I'm going to get a little technical here but look, a best fit line of the oil price for that time frame would have to pass through $141 per barrel on some day, that is the mean value theorem. The area below the mean, the days below average will exactly cancel the days above. Therefore we are guaranteed, by that prediction, of oil reaching either (not all scenarios are listed)
a) a constant $141 per barrel for the second half of 2008
b) that the higher prices go in the summer above $141 the lower they will go below it in the winter.
c) If we get their predicted $200 spike this summer they are predicting oil to be around $80 by this winter.
d) If the spike only goes to $150 then we are looking at a predicted low of around $130 this winter.
The other option would be that we are falling off peak and the price curve will just keep going up and reach that $200 sometime next year. Then GS has signalled oil will move up from where it is.
To be honest I think a summer superspike with a drop back to $80 would be less severe than a prolonged $141.
Let's make no mistake though GS has done a complete 180% on prices and is no doing us doomers proud.
$141 average has to mean at least $5 per gallon at the pump and a winter of near $4.
Jeoffrey may be doing us a service that no one else has the courage to do. The King of SA is saying 'noone is going away empty from the spiggot.' That is very subtle and glosses over alot of complexities in the market, especially the futures. _________________ I return to you now at the turning of the tide.
Posted: Fri May 16, 2008 1:22 pm Post subject: Re: Another Record ($127.79)
Boy! These folks are a fickle bunch but we've seen them make these claims of "extra goo coming soon" before. It should have a little calming affect on the markets as they eat some more donkey $hit. Oh wait maybe its camel $hit.
Quote:
May 16 (Bloomberg) -- Saudi Arabia, the world's largest oil exporter, will increase crude oil production by 300,000 barrels a day next month in response to customer requests.
The country will pump 9.45 million barrels a day in June, Saudi Oil Minister Ali al-Naimi said in Riyadh today, following a meeting between U.S. President George W. Bush Saudi Arabia's King Abdullah. Earlier today, U.S. officials including National Security Adviser Stephen Hadley had said Saudi Arabia's policy was to supply extra oil only if customers needed it.
``On May 10 we increased our response to our customers by 300,000 barrels because they asked for it,'' al-Naimi said. ``So our production for June will be 9,450,000 barrels per day. This is the request of about 50 customers worldwide.''
Posted: Fri May 16, 2008 1:29 pm Post subject: Re: Another Record ($127.79)
Gandalf_the_White wrote:
b) that the higher prices go in the summer above $141 the lower they will go below it in the winter.
Actually our goose got cooked back in October of 2007 when the resulting post-summer sell off never happened. The October, November, December period of 2007 was higher that the June, July August period 2007.
If the trend of 2007 repeats in 2008 the summer oil will be cheaper than the fall-winter period. I think oil come new years could be pushing $160 or $170 based on what has become the new normal.
Joined: Dec 02, 2005 Posts: 6384 Location: Oil-addicted Southern Californucopia
Posted: Fri May 16, 2008 2:21 pm Post subject: Re: Another Record ($127.79)
Novus wrote:
...the new normal.
Are all "psychological barriers" broken now? Is that an obsolete concept? _________________ "Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
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